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We evaluate a major personal income tax reform in Uganda that came into effect in 2013. The reform increased the tax-free lower threshold, increased tax rates for higher incomes and introduced an additional highest tax band. Using the full universe of administrative Pay-as-you-earn (PAYE) data submitted by employers in the formal sector we specifically analyze the impact of the introduction of an additional top tax band on chargeable income. Preliminary results show a positive elasticity of taxable income similar in magnitude to earlier results from developed countries. As intended by policy makers the share of tax payers in the lower tax-free tax bracket decreased after the reform. We contribute to the very scarce literature on effects of personal income tax reform on employee income in a low-income country in Africa.
